Economics is often used in literary studies, but rarely free market economics. Austrian economics, with its emphasis on subjective value (Menger), human action (Mises), spontaneous order and knowledge (Hayek), and entrepreneurship (Kirzner), seems a particularly fruitful source of ideas for literary studies.

Friday, April 29, 2011

Jane Jacobs, Austrian Economist (of sorts)

I have lately written a bit on Richard Florida, though he is hardly an Austrian economist. He is, however, greatly influenced by Jane Jacobs, and Jane Jacobs came to essentially the same conclusions as Mises and Hayek in regards to the city that they did in regards to the economy as a whole. She was talking about the details of a microcosm, while they talked about the general features of a macrocosm, but they both were in fact discussing the same thing, as Jeff Riggenbach argues. Not all Austrian economists were either Austrian, influenced by them, or even economists.

The lessons of Jane Jacobs and those she influenced are thus of great interest to us here. More than that, as I have often heard Pete Boettke say, it is more important we be good economists than Austrian purists -- even as we are, in fact, in the Austrian tradition precisely because we think it is the most correct understanding of social order, particularly the economy.

5 comments:

To clarify - you just mean that she has a spontaneous order perspective?

This is true, and I'm a strong proponent of recognizing common ideas in others - but I think you'll find that a lot of people are "sort of Austrians" if you brand spontaneous order as an "Austrian" idea. I got into complexity theory and emergent order long before I even knew the Austrian school existed.

Spontaneous order, and local knowledge as well. She's very Hayekian on many of her ideas and observations about how the real world works, vs. how city planners imagine it could work.

As an explicit social theory, spontaneous order has its origins in the Austrian school -- Hayek and Polanyi. Hayek was influenced in no small part by the Austrian biologist, Bertalanffy, who wrote on General Systems Theory. So the idea preceeds Hayek, but is introduced into social theory by him. There are aspects, though, that were in the air around the time Hayek concenved the idea as a social theory, of course, including cybernetics. There is also the parallel development of complexity, emergence, and self-organization that could have benefited from a knowledge of Hayek's work, so that so much did not have to be reinvented. But that's the nature of things, sometimes.

These ideas about spontaneous organization go back a long way, Troy. And ideas about regional spontaneous organization go back through Alfred Marshall and Adam Smith.

That is the nature of things. And like I said - I don't want to detract from this tendency in people to recognize common ideas in others (I personally am on record calling Matt Stone and Trey Parker Keynesians after all!). The ability to see commonality is very good. I guess my point is this - there are a lot of people, like Krugman especially on cities and spontaneous order, that sound a lot like Jane Jacobs and Hayek to me. Now his inspiration came from Smith, von Thunen, and Marshall - a different tradition. But if your concern is for the idea of spontaneous order rather than the Austrian tradition specifically I think a lot of people would benefit from a wider appreciation of guys like Krugman. When I think of "spontaneous rather than planned order of cities" my mind goes first to Krugman, that's all... which makes me wonder exactly what is meant by "Austrian" here.

Oh - btw - I left that Koch brothers comment on Coordination Problem. I was hoping you'd get a kick out of that.

Everyone has monied backers, and the backers put up money because they like what people say. People don't say things because there's Koch money (or Soros money) in it for them. Those conspiracy theories get tiring.

von Thunen, Alfred Marshall, and Adam Smith all got glimpses at it, but none of them really understood it in its full complexity. Obviously von Thunen, for example, came up with a grossly overly simplistic, completely unrealistic model -- which is exactly what one needs at times. There is some insight into the fact that there is self-organization of sorts, but certainly not complexity -- and it certainly doesn't deal with the full scale of complex self-organization Hayek and Jacobs are talking about. Smith, too, with his idea of the invisible hand, has a vague insight into the fact that patterns emerge out of human interactions to create an order that then influences and directs further human actions, but he doesn't explain the mechanism to the extent either Hayek or Jacobs does. Further, Hayek's idea of spontaneous social orders is applicable to other social orders as well, and thus is far more extensive. Nobody is claiming that either Hayek or Jacobs came to their insights whole-cloth, with no past influences. That cannot happen. They each came up with similar ideas because a variety of ideas were in the world at the time each was writing, and that influenced their readings of the world, drawing them to similar conclusions. I would argue, though, that the tendency to read the world rather than calculate it is a featuer of Autrianism -- and of Jacobs, as well. Which is why they both deal with the world in its full complexity.

That was pretty funny on CP. :-) We both certainly agree on the absurdity of assuming that money is buying the beliefs rather than the beliefs attracting the money. My basic rule: if it sounds like a conspiracy theory, it's almost certainly wrong.